Thymidine is a precursor for the manufacture of two anti-AIDS drugs, AZT and d4T. Currently, thymidine is manufactured primarily through a chemical synthesis process. AZT manufacturing cost is very sensitive to thymidine price since the AZT production process is based on a relatively low yield, multiple-step synthesis from thymidine. Reduction on the price of thymidine should greatly reduce the cost of AZT treatment for AIDS patients. A fermentation process for the production of thymidine has been developed, which has the potential to greatly reduce its cost of manufacture. Two key enzymes from phages have been utilized through gene cloning and expression. The joint expression causes cells to excrete significant amounts of thymidine. The production of either enzyme is lethal to the cells. The genes for both enzymes have been modified so that their expression is tightly regulated and is inducible by a temperature shift. One of the phage genes has been stably integrated into the host chromosome. The proposed research will integrate and stabilize the three genes that code for the second enzyme to achieve a fermentation process with a commercial thymidine titer.